SUSSEX, Wis.--(BUSINESS WIRE)--Quad/Graphics, Inc. (NYSE: QUAD) (“Quad/Graphics” or the “Company”)
today reported preliminary unaudited fourth quarter and full-year 2012
results in advance of management's attendance at the 2013 Baird Business
Solutions Conference in New York City on February 27, 2013. For
reconciliation of Adjusted EBITDA and Recurring Free Cash flow to U.S.
generally accepted accounting principles (GAAP) measures, please see the
accompanying information.

“Despite ongoing economic and industry challenges in 2012, we expect our
fourth quarter and full-year 2012 results to be in line with our
previously discussed expectations”

Highlights of expected results for Fourth Quarter and Full-Year 2012:

Net sales expected to be $1.1 billion in the fourth quarter and $4.1
billion for the full-year 2012.

Adjusted EBITDA expected to be $174 million in the fourth quarter and
$566 million for the full-year 2012.

The Company expects to generate $375 million in full-year Recurring
Free Cash Flow, surpassing increased revised guidance of $340 million,
partially benefitted by $15 million in lower capital expenditures that
moved from 2012 into 2013.

In 2012, the Company repaid $120 million in debt, maintaining its
year-end leverage of 2.39x within the targeted range of 2.0x to 2.5x.

“Despite ongoing economic and industry challenges in 2012, we expect our
fourth quarter and full-year 2012 results to be in line with our
previously discussed expectations,” said Joel Quadracci, Quad/Graphics
Chairman, President & CEO. “During the fourth quarter, we paid a $2
special dividend and announced an increase in our regular 2013 quarterly
cash dividend by 20% to $0.30 per share. In early 2013, we completed the
Vertis Holdings, Inc., acquisition, which is a natural and strategic
fit. We believe all of these activities added value for our
shareholders, and were made possible by our strong focus on generating
Recurring Free Cash Flow and maintaining a strong balance sheet, while
simultaneously paying down debt.”

The Company's management team will make a presentation at the 2013 Baird
Business Solutions Conference at The Pierre in New York City on February
27, 2013. The presentation may include forward-looking and other
material information and will be available on the Company's website at http://investors.qg.com.

Quad/Graphics will also hold a conference call at 10 a.m. ET / 9 a.m. CT
on Tuesday, March 5, to discuss fourth quarter and full-year 2012
results. To access the conference callwith slide show, it is
recommended that you listen via computer at: http://us.meeting-stream.com/quadgraphics_030513.

If for any reason you are unable to stream, you can listen to the audio
via the telephone by calling:

Toll-Free: (877) 217 - 9946 (US/Canada)

Toll: (702) 696 - 4824 (International)

Conference ID: 76755678

The replay will be available for 30 days following the conference call.
To access the replay via phone, please call (855) 859-2056 or (404)
537-3406 and enter the Conference ID number 76755678. To access the
replay via the internet, please use the following link: http://us.meeting-stream.com/quadgraphics_030513.
Registration is required for replay.

Forward-Looking Statements

This press release contains certain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include statements regarding, among other
things, our current expectations about the Company's future results,
financial condition, goals, strategies, revenue, earnings, free cash
flow, margins, prospects and/or outlook and are indicated by words or
phrases such as "anticipate," "estimate," "expect," "project,"
"believe," and similar words or phrases. These forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause actual results to be materially different from
those expressed in or implied by such forward-looking statements.
Forward-looking statements are based largely on the Company's
expectations and judgments and are subject to a number of risks and
uncertainties, many of which are unforeseeable and beyond our control.

The factors that could cause actual results to materially differ
include, among others: the impact of significant overcapacity in the
highly competitive commercial printing industry, which creates downward
pricing pressure and fluctuating demand for printing services; the
inability of the Company to reduce costs and improve operating
efficiency rapidly enough to meet market conditions; the impact of
electronic media and similar technological changes including digital
substitution by consumers; the impact of changing future economic
conditions; the impact of changes in postal rates and regulations and
other laws and regulations including those relating to privacy; the
failure to renew long-term contracts with clients on favorable terms;
the failure of clients to perform under such long-term contracts due to
financial or other reasons or due to customer consolidation; the failure
to successfully identify, manage, complete and integrate acquisitions
and investments, including with respect to the operations of Vertis
Holdings, Inc.; the impact of fluctuations in costs and the availability
of raw materials; the impact of increased business complexity as a
result of the Company's entry into new markets; the ability of the
Company to make the significant capital expenditures needed to remain
technologically and economically competitive; the impact on
Quad/Graphics class A common shareholders of a limited active market for
Quad/Graphics common stock and the inability to independently elect
directors or control decisions due to the class B common stock voting
rights; and the other risk factors identified in the Company's most
recent Annual Report on Form 10-K, as such may be amended or
supplemented by subsequent Quarterly Reports on Form 10-Q or other
reports filed with the Securities and Exchange Commission.

Except as required by the federal securities laws, the Company
undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.

About Quad/Graphics

Quad/Graphics (NYSE: QUAD) is a global provider of print and related
multichannel solutions for consumer magazines, special interest
publications, catalogs, retail ad inserts, direct mail, books,
directories, and commercial and specialty products, including in-store
solutions. Headquartered in Sussex, Wis. (just west of Milwaukee), the
Company has print-production facilities as well as other support
locations throughout North America, Latin America and Europe. As a
printing industry innovator, Quad/Graphics (www.QG.com)
is redefining the power of print in today's multimedia world by helping
its clients use print as the foundation of multichannel communications
strategies to drive their top-line revenues while reducing their total
cost of print production through workflow solutions, and pioneering
distribution and mailing programs, among other offerings.

QUAD/GRAPHICS, INC.

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

EBITDA, EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA Margin

For the Three Months Ended December 31, 2012 and 2011

(in millions)

(UNAUDITED)

Three Months Ended December 31,

2012

2011

Net earnings (loss) attributable to Quad/Graphics common shareholders

$

21.0

$

(6.9

)

Interest expense

20.2

23.5

Income tax expense

14.5

34.1

Depreciation and amortization

86.0

88.7

EBITDA (Non-GAAP)

$

141.7

$

139.4

EBITDA Margin (Non-GAAP)

12.5

%

11.5

%

Restructuring, impairment and transaction-related charges

30.5

31.9

Loss from discontinued operations, net of tax

—

15.7

Loss on disposal of discontinued operations, net of tax

1.3

—

Adjusted EBITDA from continuing operations (Non-GAAP)

$

173.5

$

187.0

Adjusted EBITDA Margin from continuing operations (Non-GAAP)

15.3

%

15.4

%

Adjusted EBITDA from discontinued operations (Non-GAAP)

$

—

$

9.8

Adjusted EBITDA Margin from discontinued operations (Non-GAAP)

—

%

10.4

%

Adjusted EBITDA – consolidated (Non-GAAP)

$

173.5

$

196.8

Adjusted EBITDA Margin – consolidated (Non-GAAP)

15.3

%

15.0

%

In addition to financial measures prepared in accordance with generally
accepted accounting principles (GAAP), this earnings announcement also
contains non-GAAP financial measures, specifically EBITDA, EBITDA
Margin, Adjusted EBITDA, Adjusted EBITDA Margin and Recurring Free Cash
Flow. They are presented to provide additional information regarding
Quad/Graphics' performance and because they are important measures by
which Quad/Graphics assesses the profitability and liquidity of its
business. These measures should not be considered alternatives to net
earnings (loss) as a measure of operating performance or to cash flows
provided by operating activities as a measure of liquidity.

QUAD/GRAPHICS, INC.

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

EBITDA, EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA Margin

For the Years Ended December 31, 2012 and 2011

(in millions)

(UNAUDITED)

Year Ended December 31,

2012

2011

Net earnings (loss) attributable to Quad/Graphics common shareholders

$

87.4

$

(46.9

)

Interest expense

84.0

108.0

Income tax expense (benefit)

(31.5

)

26.0

Depreciation and amortization

338.6

344.6

EBITDA (Non-GAAP)

$

478.5

$

431.7

EBITDA Margin (Non-GAAP)

11.7

%

10.0

%

Restructuring, impairment and transaction-related charges

118.3

114.0

Loss on debt extinguishment

—

34.0

Loss from discontinued operations, net of tax

3.2

38.6

Gain on disposal of discontinued operations, net of tax

(34.0

)

—

Adjusted EBITDA from continuing operations (Non-GAAP)

$

566.0

$

618.3

Adjusted EBITDA Margin from continuing operations (Non-GAAP)

13.8

%

14.3

%

Adjusted EBITDA from discontinued operations (Non-GAAP)

$

(1.5

)

$

19.5

Adjusted EBITDA Margin from discontinued operations (Non-GAAP)

(4.7

)%

5.7

%

Adjusted EBITDA – consolidated (Non-GAAP)

$

564.5

$

637.8

Adjusted EBITDA Margin – consolidated (Non-GAAP)

13.7

%

13.7

%

In addition to financial measures prepared in accordance with generally
accepted accounting principles (GAAP), this earnings announcement also
contains non-GAAP financial measures, specifically EBITDA, EBITDA
Margin, Adjusted EBITDA, Adjusted EBITDA Margin and Recurring Free Cash
Flow. They are presented to provide additional information regarding
Quad/Graphics' performance and because they are important measures by
which Quad/Graphics assesses the profitability and liquidity of its
business. These measures should not be considered alternatives to net
earnings (loss) as a measure of operating performance or to cash flows
provided by operating activities as a measure of liquidity.

QUAD/GRAPHICS, INC.

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

RECURRING FREE CASH FLOW

For the Years Ended December 31, 2012 and 2011

(in millions)

(UNAUDITED)

Year Ended December 31,

2012

2011

Net cash provided by operating activities

$

354.2

$

371.1

Add back non-recurring payments:

Restructuring payments, net

113.4

125.2

Worldcolor bankruptcy payments

10.4

12.4

Recurring cash flows provided by operating activities

478.0

508.7

Less: purchases of property, plant and equipment

(103.5

)

(168.3

)

Recurring Free Cash Flow

$

374.5

$

340.4

In addition to financial measures prepared in accordance with generally
accepted accounting principles (GAAP), this earnings announcement also
contains non-GAAP financial measures, specifically EBITDA, EBITDA
Margin, Adjusted EBITDA, Adjusted EBITDA Margin and Recurring Free Cash
Flow. They are presented to provide additional information regarding
Quad/Graphics' performance and because they are important measures by
which Quad/Graphics assesses the profitability and liquidity of its
business. These measures should not be considered alternatives to net
earnings (loss) as a measure of operating performance or to cash flows
provided by operating activities as a measure of liquidity.

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